Part C (9 marks)

How to answer:

RState the Relevant law;

AApply the Relevant Law to the facts;

Question

Kelly seeks your advice on the following events:

(i)In early September, Kelly decided that she plans to hold another extra-ordinary general meeting to become the only shareholder of Shoemart. She plans to amend Shoemart's Constitution to enable "any owner of more than 75% of the shares in the company to compulsorily acquire the shares of other members for $2.50 per share". The shares are worth $4.00 each based on a recent valuation. Discuss whether she will succeed. (2.5 marks)

(ii)She also plans to change Shoemart to a public company called "Kelly Shoes Ltd". Discuss what requirements need to be met for this change. (2 marks)

(iii)Kelly succeeded in changing the name to Kelly Shoes Ltd. The company set up a wholly-owned subsidiary called Acme Pty Ltd to make hats, with Kelly's friend Rachel and Monica as Acme's directors. Kelly seeks your advice on the liability of Peggy, Buddy, Rachel, Monica, Kelly Shoes Ltd and herself, in the event that Acme Pty Ltd is wound up with debts owing.There were no tort liability claims. (2 marks)

(iv)Peggy wishes to give 1 share in Shoemart to her closest friend, Elle.On 25^th August, Kelly informs Peggy that she refuses to register the transfer as she has not liked Elle since they were children.Advise Kelly on any action that may be taken to have the share registered in Elle's name. (2.5 marks)